Ethiopia gets World Bank loan for power upgrades

Ethiopia has received a $145.8 million loan from the International Development Association (IDA), part of the World Bank Group, to begin modernizing its electricity system in Addis Abeba. The loan was approved unanimously by the Ethiopian Parliament on October 13, according to the Ethiopian News Agency (ENA).

Funds will improve power infrastructure

The money will be used to expand the city's transmission network, build new substations, upgrade existing infrastructure, and install underground power lines. These changes are intended to make electricity supply more reliable, especially as Ethiopia prepares to host the 32nd United Nations Climate Change Conference (COP32) in 2027.

Parliamentary leader highlights event needs

Fekadu Tessema, head of a parliamentary group, said the investments should ensure the electricity supply meets the needs of the upcoming climate conference. Ethiopia has increased its electricity production, with Prime Minister Abiy Ahmed announcing in April 2026 that the country had reached 10,000 MW of production capacity.

New projects boost energy output

This growth is partly due to new infrastructure, such as the Assela wind farm. The Grand Ethiopian Renaissance Dam (GERD), completed in September 2025 on the Blue Nile, has a capacity of 6450 MW and is expected to further increase the nation’s electricity supply and support industrial development.

Electricity access remains uneven

Despite these gains, only 56.6 percent of Ethiopia’s population had access to electricity in 2024, according to the World Bank. However, even those with access often face unreliable or low-quality service. In 2025, only 44 percent of residents had electricity that met minimum quality standards.

World Bank and Denmark fund more access

To improve this, the World Bank announced in August 2025 a $400 million loan, along with a $24 million grant from Denmark, to provide nearly six million people with access to clean and reliable electricity.